Required radio operators to obtain a license, gave the Commerce Department the power to deny a license, and began a uniform system of assigning call letters to identify stations. Saved lives at sea, including more than seven hundred rescued by ships responding to the Titanic’s distress signals two years later. seagoing ships carrying more than fifty passengers and traveling more than two hundred miles off the coast to be equipped with wireless equipment with a on e- hundre d- mile range. More significantly, by this time Congress and the president had sided with the alread y- powerful radio networks and acceded to a system of advertisin g- supported commercial broadcasting as best serving the “public interest, convenience, or necessity,” overriding the concerns of educational, labor, and citizen broadcasting advocates. Its jurisdiction covered not only radio but also the telephone and the telegraph (and later television, cable, and the Internet).
With passage of the Communications Act of 1934, the FRC became the Federal Communications Commission (FCC). Although the FRC was intended as a temporary committee, it grew into a powerful regulatory agency.
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To restore order to the airwaves, Congress passed the Radio Act of 1927, which stated an extremely important principl e- licensees did not own their channels but could only license them as long as they operated to serve the “public interest, convenience, or necessity.” To oversee licenses and negotiate channel problems, the 1927 act created the Federal Radio Commission (FRC), whose members were appointed by the president. Because NBC was still charging some of its affiliates as much as $96 a week to carry its network programs, the CBS offer was extremely appealing. Some affiliates received thousands of dollars per week merely to serve as conduits for CBS programs and ads. In theory, CBS could now control up to twent y- four hours a day of its affiliates’ radio time. The network provided programs to the affiliates and sold ad space or sponsorships to various product companies. (Bernays played a significant role in the development of the public relations industry see Chapter 12.) Paley and Bernays modified a concept called option time, in which CBS paid affiliate stations $50 per hour for an option on a portion of their time. One of Paley’s first moves was to hire the public relations pioneer Edward Bernays to polish the new network’s image. In 1928, William Paley, the twent y- seve n- yea r- old son of Sam Paley, owner of a Philadelphia cigar company, bought a controlling interest in CBS to sponsor the cigar brand, La Palina.
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